Now That Obama Has Won, Which ETFs Could?

November 5th at 10:00am by Tom Lydon

Barack Obama and ETFsIn the post-election hangover we’ve all got, now investors are looking ahead to what sectors and exhange traded funds (ETFs) are best poised for success under an Obama administration.

Agriculture and infrastructure are likely to benefit from Barack Obama’s victory last night, reports Aaron Task for the Tech Ticker. He has pledged support for both ethanol and infrastructure spending, and there are several ETFs that could reap the rewards from this if he follows through. Among them:

Market Vectors Agribusiness (MOO) is down 49.1% year-to-date.

Agriculture ETF

iShares S&P Global Infrastructure (IGF) is down 37.2% year-to-date.

Infrastructure ETF

There’s a likelihood that Obama will raise taxes on dividends, which would make closed-end muni bond funds attractive for investors, as well.

James Altucher, managing partner at Formula Capital, is less optimistic than others about how biotechnology and health care will do under Obama. He’s also skeptical that energy will perform well, because if oil falls even further, interest in such technologies could wane.

Looking back in history, Aaron Task for the Tech Ticker says that the stock market fares better under Democratic presidents than their Republican counterparts. Among the facts he cites include:

  • Since 1901, the S&P 500 rose an average of 7.2% under Democrats vs. 3.2% under Republicans, according to Ned Davis Research.
  • In the last seven periods where Democrats had complete control of U.S. political power, the S&P 500 rose an average of 14.7%, according to Bespoke Investment Group.

It should be noted though that we’re in a climate not seen in decades, so only time will tell if this continues to be true for the markets.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.